With all of the recent drama in Europe taking center stage, many quality U.K stocks have taken a dive in price and are near their 52-week lows. These stocks are beaten down because of recession or depression fears in Europe and a possible growth slowdown in the rest of the world.
However, there are many U.S. based companies that derive significant amounts of revenue from international sales and they are not being painted with the same brush. For example Coca-Cola (KO) is trading at a high valuation, even though a significant portion of it's revenue is generated in foreign lands.
Today, I decided to focus on three U.K. stocks that pay significant dividends and are easy for U.S. investors to add to their dividend income portfolio.
BHP Billiton PLC (BBL)
BHP Billiton is among the world's largest producers of major commodities, including aluminium, copper, energy coal, iron ore, manganese, metallurgical coal, nickel, silver and titanium minerals, and uranium along with substantial interests in oil and gas.
BHP Billiton Plc has an American Depositary Receipt (ADR) program under which each American Depositary Share represents two underlying BHP Billiton US $0.50 ordinary shares held by the Depositary. The BHP Billiton ADRs are traded on New York Stock Exchange (NYSE). The dividend is semi-annual and there is no foreign withholding tax for U.S. investors.
- Market Cap: $143.61 billion
- Forward PE Ratio: 8.83
- Dividend Yield: 4.08%
- Payout Ratio: 51.46%
- Beta: 1.56
- 52 week Range: $49.08 - $78.30
- Current Price: $53.95
Tesco PLC (OTCPK:TSCDY)
Tesco is the UK's largest retailer and one of the world's leading international retailers. Tesco has around 5,000 stores worldwide, employing over 500,000 people in the 14 countries in which it operates.
Every Tesco ADS share represents three (3) Tesco Ordinary shares. Ordinary Shares trade primarily in the UK and pay dividends in pounds sterling. It does not trade on a US exchange. The ADS shares are unlisted and trade OTC (over the counter). The ticker symbol is (OTCPK:TSCDY). The dividend is semi-annual and there is no foreign withholding tax for U.S. investors.
- Market Cap: $38.91 billion
- PE Ratio: 8.41
- Dividend Yield: 4.84%
- Payout Ratio: 40.16%
- Beta: 0.84
- 52 week Range: $14.37 - $20.84
- Current Price: $14.53
Unilever PLC (UL)
With more than 400 brands focused on health and wellbeing, no company touches so many people's lives in so many different ways.
The portfolio ranges from nutritionally balanced foods to indulgent ice creams, affordable soaps, luxurious shampoos and everyday household care products. The company produces world-leading brands, including Lipton, Knorr, Dove, Axe, Hellmann's and Omo, alongside trusted local names such as Blue Band, Pureit and Suave.
Unilever's ratio is 1:1, i.e. one ADR represents one underlying Unilever PLC share. Unilever PLC ADRs trade on the NYSE. The dividend is quarterly and there is no foreign withholding tax for U.S. investors.
- Market Cap: $40.8 billion
- Forward PE Ratio: 13.09
- Dividend Yield: 3.89%
- Payout Ratio: 59.49%
- Beta: 0.74
- 52 week Range: $29.73 - $34.77
- Current Price: $31.82
The future is uncertain and the markets may correct even more in the near term. However, I believe that these three large and stable dividend payers offer U.S investors an opportunity to generate income, yet still maintain a margin of safety with a lower entry price that represents value for the long term.